The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

James Gorman, Chairman & CEO Of Morgan Stanley

Let's face it, the Facebook IPO was a disaster. Even the CEO of the bank in charge of taking it public says he's disappointed.

James Gorman, head of Morgan Stanley, the lead underwriter in the Facebook IPO, addressed the messy offering in a weekly strategy meeting. As the bank at the helm of the most anticipated IPO in history Morgan Stanley should be celebrating but instead Gorman is busy playing defense.

Gorman told employees that the bank worked "100% within the rules" and that "speculation of nefarious activity" in regards to the Facebook IPO are untrue, according to Dow Jones newswire.

Morgan Stanley cut its outlook for Facebook’s revenue growth during the IPO roadshow. As my colleague Steve Schaefer points out that could be bad news for Morgan if the information was only shared with certain clients.

Gorman confirmed that regulators have been in touch over the allegations that it shared information about Facebook with some clients ahead of the IPO, Dow Jones reports.

Facebook shares were priced at $38 but are down 25% since the IPO. Shares are trading at $28.23 today.

Morgan Stanley investors are also suffering amid the IPO mess with its shares down 23% in May. Shares of Morgan are trading at $13.26, down 12% year to date. Meanwhile, rival Goldman Sachs is up 5% so far in 2012. Goldman was thought to have dropped the ball when it missed the chance to lead the Facebook IPO.

Some are blaming Facebook's rocky start on technical glitches courtesy of Nasdaq. On IPO day trading of Facebook shares were delayed by about 30 minutes. Gorman is among the crowd pointing the finger at Nasdaq. He said in the meeting today that the issues resulted in "unprecedented confusion and disarray."